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Will Healthy Revenue Growth Boost Ericsson's Q4 Earnings Results?
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Ericsson (ERIC - Free Report) is set to release fourth-quarter 2024 results on Jan. 24, before the opening bell. In the last reported quarter, the wireless equipment provider surpassed the Zacks Consensus Estimate by 2 cents.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The company is expected to report top-line growth year over year in the fourth quarter of 2024, backed by several customer wins and growing network investments. Strong focus on innovation, initiative to improve working capital management and cost optimizations are tailwinds.
Factors at Play
During the quarter, Ericsson entered a multi-year partnership with MasOrange, Spain's largest communications service provider. Per the agreement, ERIC will streamline the integration of MASMOVIL and Orange Spain’s existing networks. It has also secured a 5G contract with Chunghwa Telecom to modernize Taiwan’s network infrastructure.
Epiroc, a prominent provider of mining equipment and solutions, has opted to use Ericsson’s next-generation private network solution to drive digital transformation in Mexico's mining operations. These customers’ wins are expected to have a favorable impact on ERIC’s earnings in the fourth quarter.
In the quarter under review, Ericsson completed an innovative 5G slicing automation project in Belgium in collaboration with the telecommunication company Orange Belgium. It has also completed a series of tests for 6G synesthesia integration and network infrastructure, marking a significant milestone in exploring key 6G technologies. Ericsson unveiled its new Compact Packet Core, a powerful cloud-native network solution that brings significant advancements for Communications Service Providers. These innovation initiatives are expected to have supported top-line growth.
Key Developments in Q4
During the quarter, Ericsson secured a favorable verdict from the U.S. International Trade Commission that validated the authenticity of its patent-infringement claim by China-based Lenovo. The trade tribunal observed that Lenovo's Motorola Mobility infringed on patents owned by Ericsson, potentially opening the doors for a possible import ban on such smartphones.
Overall Expectations
For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $6.96 billion, indicating growth from the year-ago quarter’s reported figure of $6.76 billion. The consensus estimate for adjusted earnings per share stands at 21 cents, suggesting growth from 16 cents reported in the prior-year quarter.
Our estimate for revenues from the Networks segment is pegged at SEK 45.19 billion, implying marginal growth of 0.4% year over year. For the Cloud Software and Services segment, our revenue estimate stands at SEK 18.04 billion, suggesting a 7.7% decrease year over year. Our estimate for revenues from the Enterprise business is pegged at SEK 7.4 billion, implying a 10.6% year-over-year improvement.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Ericsson this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at 21 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Ericsson currently has a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Earnings ESP for Meta Platforms (META - Free Report) is +6.89%, and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jan. 29.
The Earnings ESP for Automatic Data Processing (ADP - Free Report) is +1.15%, and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jan. 29.
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Will Healthy Revenue Growth Boost Ericsson's Q4 Earnings Results?
Ericsson (ERIC - Free Report) is set to release fourth-quarter 2024 results on Jan. 24, before the opening bell. In the last reported quarter, the wireless equipment provider surpassed the Zacks Consensus Estimate by 2 cents.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The company is expected to report top-line growth year over year in the fourth quarter of 2024, backed by several customer wins and growing network investments. Strong focus on innovation, initiative to improve working capital management and cost optimizations are tailwinds.
Factors at Play
During the quarter, Ericsson entered a multi-year partnership with MasOrange, Spain's largest communications service provider. Per the agreement, ERIC will streamline the integration of MASMOVIL and Orange Spain’s existing networks. It has also secured a 5G contract with Chunghwa Telecom to modernize Taiwan’s network infrastructure.
Epiroc, a prominent provider of mining equipment and solutions, has opted to use Ericsson’s next-generation private network solution to drive digital transformation in Mexico's mining operations. These customers’ wins are expected to have a favorable impact on ERIC’s earnings in the fourth quarter.
In the quarter under review, Ericsson completed an innovative 5G slicing automation project in Belgium in collaboration with the telecommunication company Orange Belgium. It has also completed a series of tests for 6G synesthesia integration and network infrastructure, marking a significant milestone in exploring key 6G technologies. Ericsson unveiled its new Compact Packet Core, a powerful cloud-native network solution that brings significant advancements for Communications Service Providers. These innovation initiatives are expected to have supported top-line growth.
Key Developments in Q4
During the quarter, Ericsson secured a favorable verdict from the U.S. International Trade Commission that validated the authenticity of its patent-infringement claim by China-based Lenovo. The trade tribunal observed that Lenovo's Motorola Mobility infringed on patents owned by Ericsson, potentially opening the doors for a possible import ban on such smartphones.
Overall Expectations
For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $6.96 billion, indicating growth from the year-ago quarter’s reported figure of $6.76 billion. The consensus estimate for adjusted earnings per share stands at 21 cents, suggesting growth from 16 cents reported in the prior-year quarter.
Our estimate for revenues from the Networks segment is pegged at SEK 45.19 billion, implying marginal growth of 0.4% year over year. For the Cloud Software and Services segment, our revenue estimate stands at SEK 18.04 billion, suggesting a 7.7% decrease year over year. Our estimate for revenues from the Enterprise business is pegged at SEK 7.4 billion, implying a 10.6% year-over-year improvement.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Ericsson this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at 21 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Ericsson Price and EPS Surprise
Ericsson price-eps-surprise | Ericsson Quote
Zacks Rank: Ericsson currently has a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
InterDigital, Inc. (IDCC - Free Report) is set to release quarterly numbers on Feb. 20. It has an Earnings ESP of +3.21% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Meta Platforms (META - Free Report) is +6.89%, and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jan. 29.
The Earnings ESP for Automatic Data Processing (ADP - Free Report) is +1.15%, and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jan. 29.